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ESTATE HOWARD L. GILLESPIE (07/07/75)

decided: July 7, 1975.

IN RE ESTATE OF HOWARD L. GILLESPIE, DECEASED. IN RE ESTATE OF HAZEL M. WINGERTER, DECEASED. APPEAL OF THE COMMONWEALTH OF PENNSYLVANIA


COUNSEL

Israel Packel, Atty. Gen., John M. Duff, Deputy Atty. Gen., Janet Moschetta, Asst. Atty. Gen., Harrisburg, for appellant.

J. A. Spaeder, Marsh, Spaeder, Baur, Spaeder & Schaaf, Erie, for appellee in No. 95.

David S. Gifford, Erie, for appellee in No. 96.

Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Roberts, J., filed a concurring opinion. Manderino, J., filed a dissenting opinion, in which Nix, J., joined.

Author: Pomeroy

[ 462 Pa. Page 456]

OPINION OF THE COURT

These two appeals raise identical questions concerning the taxation of joint bank accounts under the Inheritance and Estate Tax Act of 1961 [the Act].*fn1 Section 241 of the Act imposes a tax on the interest passing to the surviving party or parties to a joint tenancy on the death of

[ 462 Pa. Page 457]

    one of the joint tenants. In each of these cases (Nos. 95 and 96) the Commonwealth has appealed from a ruling that a so-called "convenience account", funded entirely by the surviving tenant, is not subject to the tax.

The facts in No. 95 are as follows. Anna Gillespie opened a joint account with her son, Howard Gillespie, on January 24, 1958 at the Security-Peoples Trust Company in Erie. Anna and Howard both signed a signature card containing the following provisions:

"The undersigned, joint depositors, hereby agree each with the other and with the bank, that all sums now on deposit or heretofore or hereafter deposited by either or both of said joint depositors with said bank to their credit as such joint depositors with all accumulations thereon, are and shall be owned by them jointly, with right of survivorship, and be subject to the order or receipt of either of them or the survivor of them and payment to or on the order of either or the survivor shall be valid and discharge said bank from liability. . . . Payment to or on order of the survivor shall be subject to the laws relating to inheritance and succession taxes and all rules and regulations made pursuant thereto. . . ."

Howard Gillespie died on August 30, 1972. On that date, the balance credited to the account was $13,197.90. The Commonwealth assessed a tax on half of his balance against Anna Gillespie as survivor. Anna promptly filed a protest with the Department of Revenue, averring that she had contributed all of the funds originally deposited in the joint account; that she had always retained the account passbook and paid all of the federal and state income taxes on the interest accruing to the account; that Howard had never made deposits in or withdrawals from the account; and that the account had been created so that ...


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